Direct Lenders or Banks: Which Should You Choose For A Loan?

Finances can be complicated but that’s only if you’re not armed with the knowledge to navigate it.

With a new year and decade comes new hope and opportunity, and if for you that involves taming your finances, then 2020 should be the year to achieve it. But it’s one thing setting this goal and another to reach it. Finances can be complicated but that’s only if you’re not armed with the knowledge to navigate it. Knowing where to look and what to look out for can give you a huge advantage when looking for further lending, whether it’s for personal or business purposes. Traditional banks have made way for many online lenders, all offering fast funding and competitive rates. So, when looking to tackle your finances, who should you go for? The trusted banks or the newer online lenders?

Before You Do Anything, Audit

Yes, it may seem like the last thing you want to do when looking to borrow money, but spending the time to go through your finances will help you in the long run. Doing this before you venture out to start applying for loans will give you a clear vision of what your affordability currently is. You may find it makes for surprise reading when you do see how much disposable income you have to work with. Hopefully, it’s positive, so that you can carry on looking for lending. If it makes for negative reading, then it’s time to rethink your plans. However, you may still be able to find a direct lender and bank loans for bad credit if your credit score is lower than expected.

Why Direct Lenders?

There is a good reason direct lending is on the rise and showing up the banks, in personal lending and in the corporate world. Recently it was reported that large-scale direct lending is on the rise displacing Wall Street as the go-to for hedge funds and buyout firms. This is a trend that is seen within personal lending also, with traditional banks being undercut by online companies offering lower rates of interest, instant approval, and flexible repayment terms. Having to visit your local branch is a thing of the past with more and more of us preferring to do our banking in the comfort of our home, as is the habit for many daily activities in general. Busy lives make way for newer ways to do things. This has seen many entrepreneurs move into the lending markets, seeing an opportunity to offer low-cost lending that the wider public is after. But this doesn’t mean all online lenders are in it for your best interests.

Beware Of Hidden High Costs

With the many options available, it goes without saying that not all will be offering you the best deals. This is where knowing how to spot a bad deal from good comes in handy. You need to be vigilant when looking for lending options as some may hide hidden costs that are not always obvious at first. Any lenders looking to charge a fee for their services should ideally be avoided, purely because there are many others out there able to offer a better deal without a fee. The best way to see your options so that you can see all the charges and terms at a glance is to use a comparison tool. This way, you’ll be able to identify the deals that are best worth your time quicker than searching manually.

Make Sure You Use a Trusted Lender

A reason why the banks have lasted so long is not just because of their power, it’s because they are all household names. Most people, even if they don’t use them, can name the main banking corporations, meaning that they are a trusted source for reliability when it comes to lending. We recommend always going for a trusted source, but this doesn’t necessarily mean using the banks. Traditionally, you wouldn’t have had much choice to not go with a bank, apart from shady loan sharks and family. But now there are so many options, it can be easy to go with what seems like a legitimate lender that turns out to be a scam or worse. The easiest way to check if you’re not sure is by checking the Better Business Bureau. You’ll find a list of trusted lenders and ones that have been reported to avoid, including online direct lenders and banks. It’s better to be safe than sorry when it comes to your finances.

Choose the Best Option For You

In the end, choosing a direct lender or bank to apply for a loan is your choice. Both have their advantages and disadvantages and the best deals will heavily depend on what your credit rating currently is and what you can afford to pay. If a bank can offer you a lower interest and preferable repayment terms, go for it. If an online lender can offer you the money on the same day whilst charging you no fee, choose this. Rather than choosing between them, you can compare them both and find the best lending deals that can work out to be either.

If you are searching for a place to secure a personal loan please consider www.creditninja.com for your funding solutions.

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